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Digital Disruption: Changing The Banking Industry

Mobile financial services are becoming more context-aware and going beyond replacing the basics you can do on a web site

Digital transformation is changing every industry, and unsurprisingly, banking is at the forefront of this trend. Banks need to improve the customer experience, increase operational efficiency and respond faster to changing business environments. Avaya has already seen major disruptive trends in the financial sector, and this year these trends are set to accelerate.  

The first key trend is mobile: mobile is not just a form factor, it is a different experience. This holds especially true in India, which has 77% of urban users and 92% of rural users who consider mobile as the primary device for accessing the Internet, largely driven by availability and affordability of smartphones (IAMAI-IMR report).

Mobile financial services are becoming more context-aware and going beyond replacing the basics you can do on a web site. While the mobile, financial services customer experience has been cumbersome and time-consuming with passwords, codes and security questions, advances in context-aware computing will enable the mobile customer experience to be on par with other mobile experiences. Budding context-enriched services are predicted to use situational and environmental information about the user's presence, social attributes, location, etc. to foresee end users' immediate requirements. Rising demand to augment productivity and collaboration is likely to propel context aware computing market share over the next seven years.

Biometric technologies such as voice authentication, fingerprint and facial recognition are ready for prime time and banking institutions are ready. It's a challenge being felt around the world: in the Middle East, Emirates NBD Bank has implemented a biometrics log-in capability, where customers can use a Touch ID on the Emirates NBD Mobile Banking App to securely log into all their accounts. Appropriate handling of privacy and trust issues may further boost context aware computing market size over the years.

With context-aware computing for banking, financial and insurance on target to grow from $3.25 billion in 2013 to $13.8 billion in 2018, 2017 is shaping up to be a very pivotal year for mobile customer experience in financial services. Context is anticipated to be the most adopted component and is expected to lead the industry over next few years. As per Global Market Insights, it is likely to reach at USD 56 billion by 2023, growing at over 30% CAGR.

Escalating penetration of mobile computing devices such as tablet, PC, and smartphone along with advent of smart wearable devices is projected to further catalyze the context aware computing market demand from 2016 to 2023.  

Escalating enterprise investments in context-aware applications and technologies owing to growing popularity regarding enterprise mobility is predicted to fuel the context aware computing market growth from 2016 to 2023. As banking and finance companies continue their efforts to digitally transform in 2017, this process will shine an even brighter spotlight on the need for modernizing security, in particular identity access management systems. Companies must abandon their legacy identity security tools and begin deploying new systems that are highly scalable and equipped with high-end encryption enable a high quality user experience as well as the best security.

Security concerns are also leading to increased interest in blockchain. In fact, most blockchain deployments will be in the security and fraud areas, and expect fintech to massively use it. It will also change how payments are made. The Reserve Bank of India (RBI) has signaled a favorable view saying blockchain will help the country's banking sector. The RBI's research arm, the Institute for Development and Research in Banking Technology (IDRBT), in a January 2017 research report (pdf), said it can bring cost savings, efficiency, and transparency to the banking industry.

 With the use of blockchain technology, each leg of the transaction can be recorded and traced, making the ultimate destination and use of the funds clearer. This means combating financial crime such as money laundering also becomes easier.

Banking customers' preferences and expectations are changing. There is a great amount of interest from banks in how they can use blockchain technology. It does seem to present huge opportunities and provide potential to improve processes to enable customers to transact more efficiently but also to combat fraud and money laundering." Today, Avaya works with the top 10 largest banks in the world to help them meet these changing expectations seamlessly - from mobile apps to self-service channels to social media tools.

Avaya customer engagement solutions are being used by banks in the region to deliver personalized, collaborative experiences, allowing customers to engage in seamless banking across channels while our fraud prevention and security features are helping to protect customers and improve service, thus creating a positive customer experience for them.

Avaya is the global market share leader in contact center solutions and has been named a Gartner Magic Quadrant Leader for Contact Center Infrastructure for 16 consecutive years.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Vishal Agrawal

The author is Managing Director, India and SAARC, Avaya

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